Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services...

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let...

Not so long ago—just last fall, in fact—Bank of America was in the news for all the wrong reasons. The company had instituted a $5 debit card fee, and faced a strong consumer backlash as a result. The incident was at least partly responsible for giving rise to the movement dubbed Bank Transfer Day.

It was likely in the works earlier, of course, but the country’s second largest back is back in the spotlight with a very different initiative. This one, however, is designed to help customers save money. In a pilot program being rolled out this week (to employees only, for now), the bank’s online customers will receive discounts from selected retail partners based on their previous spending patterns. Customers don’t even need to sign up for the service or go to a separate site, a la Groupon, discounts will be awarded in the form of cash payments once a month.

The savings won’t be immediate. Online customers will see discount offers embedded in their bank statements, or potentially in a separate tab, and buy what they choose, paying full price, then receive cash back in their accounts.

Perhaps most interestingly, the bank itself will receive no compensation from the retailers and merchants involved. It will instead use the discounts to extend relationships with existing customers—who will use their bank accounts and credit cards in the process—and of course draw new ones. For the record, BofA says it won’t share incoming customer spending data with the retail partners or anyone else, through presumably it will use the information internally.

While other banks have launched similar efforts, BofA is likely the largest financial services institution to enter this nascent field. This also means that there will be a flood of other financial institutions plunging into the business. As consumer spending patterns and habits evolve in the age of online shopping driven by social media tools and techniques, this is exactly the kind of forward-thinking initiative the industry needs to build on.

Many financial services firms still have the mentality that, in a sense, they need to remain above the fray. They finance these initiatives but they’re not directly involved, since it’s not a core competency. That may be true, but the reality is that they have the resources, they have the technology, they have the information, and most of all they have the customers. For banks to stay completely out of the transaction means denying themselves potentially significant revenue streams.

As other financial institutions enter the fray, we will likely see the process becoming simpler and more commoditized—the savings will be immediate, retailers will share the revenue, and so on. If that’s the case, then this initiative could be seen as a major turning point. Let us know your thoughts by posting below, or Tweet @bankingdotcom.


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Andy Brown

Andy is marketing director for payments at NCR. He has nearly 30 years' experience in e-payment systems from the delivery and support of systems in the Far East and Europe, from both the product management and marketing perspectives. Based in the UK, Andy is responsible for marketing NCR payment solutions.

Dena Hamilton

Dena is NCR's Director of Enterprise Fraud & Security Software Solutions. She specializes in fraud, risk, compliance and security, with over 35 years of experience in the financial services space. Her focus is the development and deployment of enterprise financial crime solutions optimized in prevention, detection and back office efficiency.

James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Neill Harris

Neill Harris is product marketing director for ATM solutions at NCR. He travels extensively to many of the world's leading banks and financial institutions, articulating how self-service technology and innovation can inform and support strategies and solve challenges.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

Cleopatra Mavredis

Cleopatra is NCR’s Global Marketing Manager for Channel Solutions and has more than 20 years of experience in the ATM industry. NCR’s channel solution portfolio is comprised of APTRA Vision, Inetco Insight and OptiSuite solutions.

Edward Wade

Edward is a freelance writer from Sheffield. Now living in London, he focuses on business and finance.